Latin American Economy & Business - December 2018

Jamaica: The inflation conundrum

Contrary to previous battles with above-target inflation, the current policy dilemma facing the Jamaican authorities is how to prevent inflation from falling back below the 4%-6% target band, which prompted a Consultation Clause with the IMF as part of the government’s borrowing agreement earlier this year. Recent signs are positive, with annual inflation rising in October, albeit as a result of higher supply-side oil and food prices, rather than stronger domestic demand.